TRENDS WITNESSED ON ENHANCED STRATEGIC ALIGNING
WITH GROUP ENTITIES IN THE HOTEL INDUSTRY


By
Prof. K. G. Ramakrishna
Chairman
Department of Commerce and Management,
Karnataka State Open University
Manasagangothri, Mysore
Dr. Padma Srinivasan
A disciple of Prof. K G Ramakrishna and
currently the HR-Head and Company Secretary of a logistics Company, Bangalore.
E-mail:
bpadmasrinivasan@yahoo.co.in
 


Introduction:

The business environment for hotels is found to be hugely susceptible to minuscule changes in the global conditions. It tempered with significant volatility and plagued by innovative competition. This fact has brought about trendy marketing strategies to retain the catchment areas.  One among such strategies for revenue maximization is group alignment. Earlier the hotels were formed as a sole trade or as a firm. Now corporate hotels have increased in number.

PROMOTING INDIAN TOURISM THRO 'INCREDIBLE INDIA ' CAMPAIGN
* In the past 18 months, India has focused on promoting tourism
* It launched an effective international advertising campaign
* India was spared the SARS outbreak, which hurt many Southeast Asian destinations
* Tourist arrivals are up in record numbers

Indian Government has enthusiastically put in a lot of interest and funds to improve tourism revenues. It has appointed professionals on the job to leverage on the Indian heritage and diverse cultural treasures. In 2003, India's tourist inflow rose 15.3% and foreign-exchange earnings through tourist arrivals rose as much as 20% over 2002's figure. In fact, tourism in 2003 exceeded pre-September 11, 2001 levels 1.

The Pacific Asia Travel Association, a trade grouping, in January-September 2003 quotes that the tourism declined over the previous year by 28.5% in Malaysia, by 12.7% in Thailand and 23.5% in China; Singapore saw a decline of 23.4 % in January-October 2003. "India's growth has been beyond expectations. Only once did we see growth of this kind and that was some years after the liberalization of the Indian economy had begun, but even then it was a corporate-driven boom. This is pure tourism," says Vijay Srinivasan, deputy general manager at Le Passage in New Delhi, which arranges high-end package tours mostly for French tour groups. Most of the five-star hotels are seeing more than 80% occupancy and some of the lesser-known five-star hotels are overbooked. "Clients who made bookings several months ago are being bounced and I am getting requests for bookings that I am not able to cater to. I have also had to move many from five-star hotels to three-star hotels," Srinivasan says.

Several publications in India quoted Conde Nast Traveller's British edition's editor, Sarah Miller, as saying: "India's result is very exciting and shows the country's increased popularity among sophisticated travellers. It also reflects very positively on individuals involved in promoting India as a tourist destination."

In 2003, India's travel-and-tourism industry is expected to have generated 529.4 billion rupees ($10.5 billion), or 2% of the country's GDP, according to a World Travel and Tourism Council report. It adds that the broader travel-and-tourism economy--that includes the railways, domestic air travel, tourism infrastructure building, and the like--is expected to total $24.3 billion, which is 4.8% of GDP. If things stay on course, tourism is set to flourish. The WTTC report says that over the next 10 years, India's travel-and-tourism industry is expected to achieve annualized real growth of 7.9% to bring in $28.4 billion in 2013. By then the travel-and-tourism economy overall is expected to hit an annual $68.3 billion2.

HOTEL GROUPS IN INDIA

The hotel industry in India has been rewriting the system, processes, approaches, functional orientation and methodologies the past few years to match the Indian campaign. A new need for proving global excellence has dominated the recent aligning behaviors.

The role played by the India Tourism Development Corporation, a public sector undertaking, is significant 3. The Ashok Chain of hotels is the largest chain in hotel industry run by the ITDC. The Ashok Group of Hotels has been India's gracious and regal host to leading national and international visitors.  The Group is known for its unique mix of traditional Indian hospitality and modern-day systems and facilities that are beyond compare.

An individual hotel or chain of hotels can represent itself in one of 3 ways:

  • As a Private label chain, with its own identity: To market a hotel as a Private Label brand is the most expensive and requires a hotel to develop, build, and market an individual identity.
  • As part of a marketing brand: A marketing brand allows a hotel to maintain its own identity, but has to market itself as part of a brand, which may involve adopting the brand logo and collateral materials
  • As an individual Hotel under a collective group of representation hotels: A representation can allow the hotel to maintain its own identity, but be represented as a large group of similar properties in the distribution channels.

Leading Hotel Chains of India 4:  Hospitality industry in India has now firmly established itself as the provider of world-class accommodation services. This has been made possible by the emergence of large Indian hotel chains and the entrance of global hospitality players.

Ambassador Group of Hotels: The Ambassador Group of Hotels in India boasts of some of the best hotels in India. Ambassador believes that a great hotel should offer more than a good night's sleep. It should create an environment that awakens your senses. It's one of the many intangible qualities you'll experience at every Ambassador hotel.

Best Western Group of Hotels: The Best Western Group of Hotels in India has of some of the best hotels in India. The hotels are located the prime tourist locations of India like the marvelous city of Mumbai, Chennai, Kolkata, Hyderabad, Khajuraho, Dehradun, Varanasi and Kovalam. The hotels run by the Best Western Group in India offer simple luxury and privacy at the same time.

Casino Hotels : The Casino Group of Hotels are located the prime tourist centers of India. The Casino Group has hotels in tourist destinations like Casino hotel at Cochin, Coconut Lagoon at Kumarakom, and many others.

Clarks Group of Hotels: The Clarks Group of Hotels in Agra, Jaipur, Shimla and Varanasi. The hotels run by the Clarks Group in India offer luxury and privacy.

Fortune Park Group of Hotels: The Fortune Park Group of Hotels in India has some of the best hotels in India. It is noteworthy that the Fortune Hotels by Welcomgroup ate a wholly owned subsidiary of ITC Hotels ltd. The hotels are located the prime tourist centre of India like Ahmedabad, Trivandrum.

Holiday Inn Group of Hotels: The Holiday Inn Group of Hotels are located in the city of Agra, Jaipur, Mumbai, Ooty and Goa.

HRH Hotels: HRH Hotels is the largest owner/manager of heritage hotels in India offering world-class accommodation options for travelers. Most of these hotels are redone former palaces, mansions, and havelies of former kings and royalty of India. The royal services and luxury offered by these hotels are unmatched and an experience not easily forgotten.

ITC Welcome group Hotels: ITC-Welcome group, India's premier chain of luxury hotels in association with Sheraton Hotels Worldwide brings the global traveler, the best of East and West: traditional Indian hospitality with contemporary international standards. The ITC Welcome group hotels are present in 41 business and tourist destinations across the country including 8 ITC-Welcome group Sheraton Hotels. These hotels offer you a gateway to India on business or leisure.

ITDC Hotels: The Ashok Group of Hotels has been India's gracious and regal host to leading national and international visitors. The Group is known for its unique mix of traditional Indian hospitality and modern-day systems and facilities that are beyond compare.

Jaypee Group Hotels : The hotels are located the prime tourist places of India. The JayPee Group has hotels in destinations like Jaypee Palace, Agra, Hotel Vasant continental and Hotel Siddharth, New Delhi and the Hotel residency manor, Mussoorie. The location of these hotels is such that the tourists get to appreciate the beauty of nature.

K Raheja Group of Hotels: The K Raheja Group of Hotels in India are located the prime tourist locations of India like the captivating destination of Kodaikanal, Mumbai and Bangalore. The hotels run by the K Raheja Group in India offers simple luxury.
Le Meridien Group of Hotels: The Le Meridien Group of Hotels is located at New Delhi, Mumbai, Chennai, Cochin, Pune and Bangalore.

Man Singh Group of Hotels: Keeping alive the old age traditions of India Mansingh group brings to the tourist the authenticity of the historic cities of Agra and Jaipur wrapped in the fragrance of the land. The hotels run by the Mansingh Group in India offer simple luxury and privacy.

Oberoi Group of Hotels: The Oberoi Group, founded in 1934, owns and manages thirty-five luxury and first class international hotels in seven countries. The Group has two principal brands - the deluxe Oberoi brand and the first class international Trident brand. Oberoi Hotels & Resorts are synonymous the world over for providing the right blend of service, luxury and quiet efficiency.

Peerless Group of Hotels: The Peerless Group is a family of hotels, resorts and inns spread out in Kolkata, Port Blair (Andamans), Mukutmonipur and Durgapur- four destinations of efficient hospitality.

Sarovar Park Plaza Hotels: Sarovar Park Plaza Hotels Group is one of the most recent but one of the fastest growing hotel chains in India. With 11 hotels already operational in different parts of the country and 6 more in the offering, the chain is poised to be a big player in Indian hospitality sector. Most of the hotels managed by Sarovar Park Plaza are located in the medium sized cities, offering the travelers visiting these places better accommodation.

Sinclair Group of Hotels: The hotels are located the prime tourist places of India like the dream destination of Darjeeling, Siliguri and Ooty.

Taj Group of Hotels: Launched by Mr. Jamshedji Nausserwanji Tata, the Taj Hotels were started almost 100 years ago. Starting with the now a major landmark of Mumbai (Bombay) the Taj Mahal Hotel, Taj group now owns around 50 hotels worldwide. The Taj Group of Hotels is grouped into strategic business units to get consistency across the different units in the same brand and standardize the product and service across the brands, making them distinct and identifiable. These brands have been classified as Luxury, Business and Leisure.
Tulip Star Group of Hotels: The hotels are located in gorgeous Goa, Kerala, Maharashtra, Rajasthan, Delhi, Uttar Pradesh, Uttaranchal, Orissa and Gujarat.

Welcome Heritage Group of Hotels : These hotels are promoting Indian Culture and Heritage and are situated all over India.

ENHANCED STRATEGIC ALIGNING WITH GROUP

The traditional patterns of individually owned hotels are changing in recent years and the industry is being increasingly associated with hotel groups.  The hotel groups normally operate hotels owned by them or leased by them paying rentals or managed as agents of owners under management contracts.  Franchise agreements are also common.

Advantages of groups 5: The hotel industry is benefited with accruing advantages like large-scale economy, risk spreading, financial, marketing and economic ease of management. Of course the hotel groups shares many problems especially of communication, controlling of costs, accountability of unit hotels, complex controlling mechanisms and geographical dispersal of hotels.

The author's survey in the Karnataka State included 65% belonging to different groups, which enjoy common business benefits and sharing of large economies. The remaining 35% belonged to individuals or partnerships. Many groups operating in the state do not have any branches other than Bangalore, Mysore and Mangalore, which are the three important business centers of the state. Huge potential market is awaiting these branches opened in tourist centers, hill stations etc. The nature of the hotel business and the limits of many hotel markets provide the main explanations for the growth of hotel companies through groups.

    * Financial economies
    * Marketing economies
    * Economies of buying
    * Managerial economies
    * Economies of risk- spreading.

Among chain hotels, IHCL has the widest geographical spread, catering to the business traveler with a presence in all major metropolitan cities through luxury hotels, and with first class business and medium tariff hotels in other cities of India. The company is equally well established in the leisure segment with its hotels being located in all the major tourist destinations of the country.

So the hotels are taking cover using the group entity and are trying to keep away the competition of global giants entering the Indian hotel industry. Hotel majors have just commenced the rat race………

Bibliography:

1. www.tourismofindia.com
2. Shailaja Neelakantan, India Reaps Rich Rewards,
www.Tourismofindia.Com
3.
www.itdc.ge
4. All the websites of the respective hotels
5. SM Jha, Hotel Marketing, Himalaya Publishing House, 1998 edition, Pages 288-307.

Authors profile:

Prof. K. G. Ramakrishna, Chairman, Dept. of Commerce and Management, Karnataka State Open University, Manasagangothri, Mysore.

Dr.Padma Srinivasan, a disciple of Prof. K G Ramakrishna and currently the HR-Head and Company Secretary of a logistics Company, Bangalore.
 


Prof. K. G. Ramakrishna
Chairman
Department of Commerce and Management,
Karnataka State Open University
Manasagangothri, Mysore
Dr. Padma Srinivasan
A disciple of Prof. K G Ramakrishna and
currently the HR-Head and Company Secretary of a logistics Company, Bangalore.
E-mail:
bpadmasrinivasan@yahoo.co.in
 

Source : E-mail November 10, 2004

 

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